Buying Property With Friends? Nail Down Your Deal First

Say you’re friends with another couple. Both families like to go to the lake in the summer. You find some lakefront property you both like, so you decide to buy it together. Best nail down first how your joint ownership set-up will work – a recent case shows why.

Jim and Sue (names changed) were friends and neighbours with Pete and Mary in Victoria. The two couples bought some lakefront property together up-island. They could use separate houses on it, and it was big enough so they could later subdivide it and each end up with their own, separate, lakefront piece of paradise.

Four years after they bought the property and after doing some significant lakefront clearing, they got the property subdivided. In the meantime, they had jointly built dock facilities on the property – a wooden walkway or wharf down to the water with a gazebo lakeside and a ramp attached to a floating dock in the lake.

Initially, they’d planned for the wharf to run down the middle between their two properties, but its location ended up differently after subdivision. The top of it was on Jim and Sue’s lot, while further down it crossed over a part of Pete and Mary’s lot.

Before and for many years after the subdivision, both families shared the use of the wharf and dock facilities. But over the years, the couples’ relationship deteriorated and friction developed over the wharf.

More than 20 years after they bought the property, the two couples ended up in court. Jim and Sue said the couples had an agreement about ongoing shared use of the wharf and dock facilities on Pete and Mary’s land after the subdivision. They also claimed that as lakefront lot owners they had rights to access the wharf from their own lot, arguing the natural boundary along the lake was different from the subdivision plans.

It turned out the couples had many discussions, when they first bought the property and again around the time of its subdivision, about mutually acceptable property arrangements and sharing the wharf and dock facilities. But they had never been able to reach a written agreement signed by both sides.

Without such a written contract and based on conflicting versions of events from the two sides, the court had to determine if there was, in fact, an agreement about sharing the dock facilities, or if Jim and Sue had rights to use the wharf on Peter and Mary’s land as they claimed.

The court ultimately decided Jim and Sue hadn’t demonstrated there was such an agreement, or that they had access rights to the disputed part of the wharf.

This case is a cautionary tale. If you buy property with someone else, it’s best that you figure out your joint ownership arrangements (and any post-subdivision arrangements) first, and document them in writing. Your lawyer can help, reducing the chance of a nasty court fight later.

Written by Janice and George Mucalov, LL.B.s with contribution by COBBETT & COTTON. This column provides information only and must not be relied on for legal advice. Please contact COBBETT & COTTON for legal advice concerning your particular case. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer. “You and the Law” is a registered trade-mark. ©Janice and George Mucalov.

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